DreamWorks Animation Launches Effort To Re-Position Itself As A Television Power

The company told analysts this afternoon that it will produce 1,200 TV episodes over the next five years, which CEO Jeffrey Katzenberg says “will give us a significant footprint across the global TV landscape.” DreamWorks Animation is “now on a path to becoming one of the biggest producers and distributors” of television following yesterday’s agreement to create 300 hours of programming for Netflix and today’s deal to make up to 1,100 half-hours for Germany’s Super RTL, which he calls “transformative.” All told, “it’s a big opportunity and a big undertaking.” Katzenberg adds that the company should see $100M in revenues from TV this year, about half of which will come from titles in the Classic Media library bought last year. Beginning 2015 the company expects to see at least $200M in TV revenue per year with gross profits of around 30%, close to what it sees from its films. Revenue from the Netflix and Super RTL deals won’t vary depending on the performance of different titles. The numbers don’t include benefits from sales of licensed merchandise, the library value of shows, or progress from its recently acquired online video service AwesomenessTV. The company isn’t ready yet to create a separate business line for television, but will consider the change. DWA shares are up about 1.8% in after market trading.

14 Comments

Ha • on Jun 18, 2013 1:49 pm

I’m glad to see they’ve chosen quality over quantity…

Reneesunshine • on Jun 18, 2013 1:49 pm

How is that quantity over quality? That’s 1200 episodes over the course of 5 years. It works out to around 9 shows per year with 26 episodes per season. That’s about how many episodes the other TV animation companies produce.

Look at Nickelodeon Animation Studio, Disney Television Animation and Warner Bros. Animation. They all have at least 8 animated series currently on the air or debuting in the future. Why should it be any different for Dreamworks? Why can’t they produce the same amount of material? It’s not like they’re trying to churn out this stuff all at once.

Anonymous • on Jun 18, 2013 1:49 pm

But those studios are part of actual conglomerates.

ok... • on Jun 18, 2013 1:49 pm

Reneesunshine clearly works for DreamWorks — that’s why “she” has such defensive responses to these comments.

J • on Jun 18, 2013 1:49 pm

Was about to say the sand thing.

Advice • on Jun 18, 2013 1:49 pm

Netflix should really look for its own kids animation content in other places as well. Putting all of your eggs in the DreamWorks basket doesn’t seem like a smart business move.

Reneesunshine • on Jun 18, 2013 1:49 pm

I think negotiating and partnering up with one studio is more desirable than having to deal with multiple studios.

You can get animation done for $18,000 for a half hour at some studios in the Orient. Do the math. Netflix could set up their own animation division on the cheap and own the content Forever.

Reneesunshine • on Jun 18, 2013 1:49 pm

I have to imagine the Dreamworks name and their portfolio played a large part in this deal. Like you say, Netflix could set up their own studio, but they’d be starting from scratch. Dreamworks Animation is a functioning animation studio with thousands of employees who know the business of animation, as well as dozens of well-known IPs. Netflix would have to hire their own staff and completely create original properties for them to work on.

I think it’s a better bet to go with a well-established studio that has properties the viewers will recognize and gravitate to. Sure, there’s something to be said for new and original creations, but you’re going to have a harder time getting people to jump on board than you would with something they’re familiar with.

I think it simply comes down to the fact that Netflix is just starting to get into original programming. They haven’t been doing it for years. They don’t have the experience to run their own studio at this point and I doubt they’re ready to make that venture. In a few years, after they have several productions under their belt, they will probably create their own production studio. But since they’re just starting out, it makes sense to partner with those who have been at it for some time. Those who have more experience.

Mark • on Jun 18, 2013 1:49 pm

@Mack Daddy, if you really think that it costs under $20,000 to produce a animated tv show then your kidding yourself.
You need a staff of writers (4-6 on your smaller shows) you need back story or premise which could easily cost you 6-7 figures depending on popularity, then you need producers, sound techs, voice actors, director and animators which according to you will set you back just $18,000 but you also need animators at home. Now this isn’t all of the people you need but it’s a example of the crew that you need.

Sure you can make it work with less people but then good luck getting any more than half a dozen quality episodes done per year. Lets also remember how invested DWA is in cgi animation, there’s a strong possibility that several if not most of these shows could well be cgi instead of 2d animation or a mixture of the two.

After paying for everything good luck getting 26 episodes done per year for any less than $5million on the cheap.

Anonymous • on Jun 18, 2013 1:49 pm

And I bet JK still wants his own network.

lovethisbusiness • on Jun 18, 2013 1:49 pm

Not much awareness of animation or the animation biz in these comments. Yeah: $18k/30 mins. LOL.

Don’t have to be “part of a conglomerate” to somehow make this deal work. Has nothing to do with it. It’s about managing talent, technology and pipeline. DWA has been trying to scale its operations and still maintain quality. Clearly, they feel capable of doing this (even though they just laid off 15% of their staff – so probably down to around 2,000 now in CA – not “thousands”). You can outsource the “backend” to Asia, but the “frontend” i.e. the “creative” (script, storyboards, layout, design etc.) is and always has been local (or run by U.S. and U.S.-trained creatives at those outsource locations). So this is what’s behind DWA’s India facility and the ramp-up in Shanghai. More complex in Shanghai, as that facility is supposed to create product for the local Chinese market as well.

And BTW, everything is CG today, whether it’s 3D or 2D. There is no more hand-drawn and photographed animation. Can’t afford it. Digital has swallowed everything.